The New Zealand government has rejected a proposal for underwater mining for iron ore deposits said to be threatening the sanctuary of the rare and endangered Maui dolphins. According to the country's Environmental Protection Authority, the project was scrapped due to the "uncertainty" about the environmental effects off the coast of New Zealand.

Mining company Trans-Tasman Resources has sought the government's final approval to mine underwater ore deposits. However, a special committee set up the environmental agency rejected the proposal.

The committee cited "uncertainties in scope and significance" that may lead to adverse environmental effects.

The decision of New Zealand is being closely followed by other governments and mining companies in the world that are interested in mining copper, cobalt and other metals on the ocean floor. According to reports, diamonds are being mined off the coast of Namibia. However, the New Zealand project was reportedly the most advanced.

In New Zealand, environmental groups, Maori tribes and fishing companies had opposed the undersea mining project because of the potential damage to the environment including marine animals like fish and the rare Maui dolphins.

The New Zealand Greens had accused the government of further endangering the rare Maui "hobbit" dolphin by opening its habitat to oil exploration and drilling. According to reports, the Greens has obtained documents under the Official Information Act containing details of the New Zealand government's plan to include more than 3,000 square kilometres of the country's West Coast North Island Marine Mammal Sanctuary.

Reports said Trans-Tasman Resources expressed its disappointment by the government's decision since it has spent about NZ$60 million on the project including the cost of scientific research and local consultation.

In a statement, the company chief executive Tim Crossley said the local community will miss out on hundreds of new jobs and claimed a possible increase of $240 million dollars in New Zealand's GDP.

Trans-Tasman said it will study the committee's ruling and evaluate other options. Reports said the decision can be appealed on points of law.

Environment groups described the New Zealand government's decision as a "victory for common sense." Kiwis Against Seabed Mining chairman Phil McCabe said that during the hearings of the project, it was clear the company had failed to do its homework on the possible environmental impact of dredging 50 million tons of seabed annually for the next two decades.

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